Is Food the Answer to Malnutrition? - The Oxford Topic of Food, Politics, and Society - page 413

how it affects nutrition, is the shadow cost of time. Thus, labor market conditions, par-
ticularly employment opportunities, will affect the demand for nutrients, the demand
for health care, the demand for leisure, and the time allocated to child care and other
“home-produced” inputs that affect the health and nutrition of children. Thus, there will
be important nutritional consequences of a range of public policies that go beyond the
impact of the more obvious ones such as interventions in food prices or food availability,
including instead a range of investments that will raise the shadow wage of women. We,
therefore, need to be cognizant of the cross-price elasticities or patterns of substitution
between the consumption of food, nonfood goods, leisure, and health care.
To amplify, the production function framework emphasized the importance of health
services, time inputs of mothers, and nutrient consumption on health and nutrition out-
comes. Government involvement in the health care sector has traditionally been high in
developing countries, with public expenditures financing large portions of health care
networks. Similarly, there is no shortage of examples in which government intervenes
in the food sector, particularly using food price policy as a means to maintaining low
and stable food prices. And, of course, active labor market policies are a hallmark of gov-
ernment intervention in their economies. In practice, there are the obvious trade-offs
in terms of government spending on health versus food subsidies, which will, in turn,
have differential impact on nutrition. Likewise, money spent on food subsidies may
displace resources to sustain government spending on jobs. The direct comparisons of
the impact of spending on health inputs or food subsidies or labor market policies are
difficult enough to make. However, there is the additional complication that involves
substitution effects in the production function: food price policy that affects food
consumption decisions will also affect demand for other goods, labor supply, and the
demand for health care through substitution. A similar story can be told for the impact
of spending on health services. The implication is that there are a series of potential
complementarities and trade-off policies that affect the price of food, health care, and
other nonfood goods, as well as the price of labor that will affect nutritional outcomes.
There is a serious paucity of research that addresses the joint demand for health care,
leisure, food, and nonfood goods. One of the few examples of which I am aware is the
work by Meyerhoefer, Sahn, and Younger (2007), using data from Vietnam, where the
conventional commodity demand framework is expanded to incorporate the demand
for health through an empirical model derived from a flexible representation of pref-
erences. Subsequent estimation of a mixed continuous/discrete choice commodity
demand and provider choice model allows the derivation of own and cross-price elas-
ticities for health care, leisure, foods, and nonfood goods, quantifying the substitution
patterns between health and other goods at various income levels. The results provide
interesting insights into the potential impact of various health care financing mecha-
nisms, as well as allowing for the calculation of substitution effects that can be used to
forecast the impact of commodity (including food) taxes and subsidies and/or labor
market policies on health care utilization. Among their interesting results is that the
demand for health care is found to be responsive to changes in the price of nonfood
goods, rice, and wages. The strong cross-substitution effect between health care and